Bargain punt pays off for shares buyer

By DANIEL RIORDAN

A punter who bet $2 million on Air New Zealand's recovery has more than doubled his or her money - thanks in part to the Government's contradictory signals to the market.

The buyer stepped in before the market opened on Tuesday morning, after the Government had spooked Monday's market with talk of statutory management for the airline.

Shares had plummeted to record lows and the buyer picked up 12.75 million B shares at 15.5c each - an outlay of just under $2 million.

Late on Tuesday, Prime Minister Helen Clark advised Air NZ shareholders not to sell their shares, causing trading to be halted the next day as the price surged.

With both classes of Air NZ shares rising again to 40c yesterday, the mystery buyer is now sitting pretty on a paper profit of $3 million - an outlay of just under $2 million now worth over $5 million.

That is, if the shares have not already been cashed in.

While brokers could provide few clues to the buyer's identity, most believe the seller was California fund manager Franklin Resources. A spokesman for the company declined to comment.

Trading in Air NZ shares can occur only in New Zealand at present.

The Australian Stock Exchange suspended Air NZ shares on September 14 when the Australian Securities and Investments Commission announced an investigation into the collapse of subsidiary Ansett and the actions of Air NZ directors.

Exchange spokesman Gervase Greene said the market was still not sufficiently informed for the securities to be traded.

Up to 20 per cent of Air NZ's turnover was normally traded through the Australian market, he said.

Meanwhile, Act MP and former market surveillance panel member Stephen Franks has offered market regulators more fuel for their Air NZ blowtorches.

Mr Franks, who says the Prime Minister's apparent "don't sell" comments could make her culpable under insider trading law, has asked the Securities Commission to check whether Air NZ directors and the Government breached that law by failing to keep details of the due diligence on the airline confidential.

He said the Government, directors and senior management could be liable to pay up to three times the amount of any gain or loss made on share trading connected with their statements.

Mr Franks has also written to the surveillance panel asking if due diligence had been authorised under exchange listing rules.

"Now that the Government seems likely to acquire extra shares ... it would seem almost certain that due diligence would be a breach of [the listing rules] if the usual deed of confidentiality has not been obtained," he wrote.

The panel and commission are investigating trading in the shares on Tuesday and Wednesday.

Both regulators were already examining Air NZ's record of market disclosure going back to last year at the request of the Australian commission.

Panel chairman Bill Falconer said it would investigate Mr Franks' claims.

"As with most things Stephen does, it's serious stuff, and we're taking it as so."

Trading in Air NZ shares remained under close review, although there was "nothing untoward" about yesterday's transactions, said Mr Falconer.

"What you saw was people exercising their judgments, one way or another."

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